If you're looking for expert insights into interesting real estate niches, then this episode is for you!
Sunrise Capital CEO Kevin Bupp sits down with us to break down three asset classes they're investing in. With two decades of experience, he has $150M real estate transactions under his belt and is a thought leader in generating cash flow and building wealth. Today, Kevin gives his perspective on the mobile home park market and the challenges in the space. He also gets down to the nitty-gritty of build-to-rent and what makes it a promising investment to consider. Lastly, he shares what they are working on in the parking sector and explains their long-term hold strategy for their deals.
[00:01 - 04:52] Mobile Home Park Investing
- Get to know Kevin
- Running the first mobile home park-specific podcast
- There's a huge supply and demand imbalance in the mobile home park market
- Large institutions and private equity investors are pouring money into the space
- Finding good deals is becoming difficult for small and medium-sized investors
[04:53 - 15:11] The Opportunities in the Build-To-Rent Space
- Kevin emphasizes the need for focus when investing in an asset
- Parking and build-to-rent are similar in terms of not being too operationally-intensive
- Data shows that there is a great demand for housing
- Kevin discusses the market in Florida and Phoenix
- Build-to-rent houses have a long-term purpose
- Materials and build are of better quality
- What does urban infill mean?
- The importance of strategic partnerships to succeed in a location
- This is the fastest-growing asset class and there's a lot of institutional interest
[15:12 - 25:14] Long-Term Stable Cash Flow
- Why Kevin and his team are not building to sell
- It takes work to flip in and out of properties, not only for the company but also for the sponsors
- There is value in small consistent wins
- Kevin talks about their current parking project and its potential for cash flow
[25:15 - 26:35] Closing Segment
Tweetable Quotes
"I think that you lose focus and you dilute your strength in any particular asset class when you're getting pulled in a million different directions." - Kevin Bupp
"I think one of the most exciting about built-to-rent is being able to actually purposely build a product today for long-term rental uses." - Kevin Bupp
"Knowledge is one thing, but having those strategic relationships are necessary, not even just with brokers, but also the municipality, the planning, zoning boards." - Kevin Bupp
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Want to read the full show notes of the episode? Check it out below:
[00:00:00] Kevin Bupp: So when you find a great mobile home park or, or even a great parking asset in a very strategic location and a growing marketplace where the demand is increasing. It's going to be very challenging to ever replace that particular asset. And I feel very much the same about these, these build-to-rent properties that we're building. And so, while I'm not going to say that we'll never sell any of these developments, that is not our intent. Our intent is to actually build to hold and ultimately, you know, build a portfolio of these strategically located infill locations and build a portfolio out of it. And so not saying that we might not flip one out to, you know, to an institution to lower our basis overall, but generally speaking, we're looking at a 10-year horizon here.
[00:00:50] Sam Wilson: Kevin Bupp. Welcome to the show.
[00:00:52] Kevin Bupp: Sam. Thanks for having me, excited to be here.
[00:00:54] Sam Wilson: Hey, man, the pleasure's mine. Appreciate you coming on today. There are three questions I ask every guest who comes to the show: in 90 seconds or less, can you tell me, where did you start? Where are you now? And how did you get there?
[00:01:03] Kevin Bupp: Yeah, fantastic. Started about 21 years ago, started buying a single-family, fixed and flip properties. Did a bunch of wholesaling as well. Built up quite a large portfolio in my early twenties of about 130 single-family rental homes at a few hundred multifamily doors.
[00:01:17] Sam Wilson: Wow.
[00:01:17] Kevin Bupp: Fast forward to today, been a full-time investor for two-plus decades. I've owned pretty much every different asset type out there, you know, office retail, industrial, self-storage, medical office. You know, today we are primarily focused on three different sectors of our business, one being manufactured housing, which we've spent the last decade in, the second being parking investments, which we've been in for a few years now. And then the fourth and probably one of the most exciting ones that we're currently involved in are built-to-rent projects, more specifically built-to-rent projects in urban infill locations in Phoenix, Arizona.
[00:01:52] Sam Wilson: That's a lot of moving parts. You're well known, obviously, for your podcast on mobile home park investing. And I think you run two different shows, don't you? There's a Real Estate Investing For Cash Flow and then...
[00:02:03] Kevin Bupp: I do. We have a mobile home park-specific podcast as well. I don't post any new episodes. I haven't for a few years, but we've got a, you know, 150 or so up there, and it still just kind of does its thing.
[00:02:12] Sam Wilson: Gotcha. Okay. Very, very cool. I mean, mobile home parks has been a hot asset class. Can you kind of give us, you know, and maybe that's, to some degree, you know, due to you, you know, kind of advertising the asset class, but I mean, tell us about it. Where has it been? Where is it now? And you know, where do you see opportunity on that front?
[00:02:30] Kevin Bupp: Yeah, it's, it's a great question. You know, it's funny, my, my business partner always kind of jokes with me that, you know, we probably did train some of our competition. We were the first podcast out there and, you know, for many years we were the only, you know, there was a little bit of other information out there in the marketplace, but, you know, we were the only podcast really speaking about it and, you know, kind of sharing techniques and strategies. And it's, you know, it's an asset class that has a diminishing supply. And so there's a massive supply-demand imbalance. You know, the demand has, you know, significantly increased over the last five plus years with, you know, just a number of larger institutions and private equity investors trying to really pour billions upon billions of dollars into the space where they had always overlooked historically, right? And so they're, you got all this money trying to come in, no new supply coming to the marketplace and it's just, it's created just a severe imbalance. And so, you know, we started buying parks 10 years ago. And, you know, back then it was, it was very mom and pop, which there's still aspects of that today. It's not fully consolidated, but it's I tell you that it's racing towards consolidation pretty quickly. So 10 years ago where we might have been, you know, the only bid on a deal or maybe there's, you know, one or two others we'd have, you know, had a much easier time of winning an opportunity back then than we would today.
[00:03:40] Kevin Bupp: And so, you know, they're, they're training at all time, low cap rates, in fact, data showed that at some point during the middle of the pandemic, you know, multifamily had always, at least over the last decades, it's been the asset class that has traded at the lowest cap rate, historically, at least for the past 10 years. Mobile home parks actually took over multifamily as far as, you know, where the average capric or trading at. And it was, it was sub-four level for a period of time. And they're still pretty much, they're down there today. You know, the institutions are just trying to gobble as much as they can. And, ultimately, it's made it a little more challenging for investors such as us, I guess you could say smaller, medium size investors and, you know, I don't necessarily have a cost to capital that would allow me to buy a stable four cap property that doesn't have upside. However, institutions they've got different sources of capital that typically is much cheaper than that of retail capital. And so there's still deals out there as, you know, you just got to pound the pavement more, you've got to, you know, turn over more rocks and find those needles in the haystacks. And they're there and we find that we just don't necessarily find it as many as we might have found years prior.
[00:04:42] Sam Wilson: Right. Yeah. I think that's a really good synopsis there. I appreciate you taking the time, you know, to share on that. I mean, if anybody says that there's no deals out there, then they're probably right. You know, 'cause that's... Tell me about this though. I mean, you guys have found some other asset classes and especially want to hear, you know, what you guys are doing on the build to rent. That's your latest and greatest kind of foray. Why do you see an opportunity there? You just talk to us about that if you can.
[00:05:06] Kevin Bupp: Yeah, no, no, absolutely. And you, I will say that, you know, we're the type of group that we really like to, we like to stay in our lane. You know, we, we, don't like to be everything to everybody. I think that you lose focus and you dilute your strength in any particular asset class when you're, you know, getting pulled in a million different directions. And so, you know, we had focused solely on mobile home parks, literally for, for seven years. That's all we did. We just kind of ignored all the other noise out there. You know, there's a million, one different ways to make money in real estate. And we, we chose that lane and we wanted to be the best at it. Parking came across our radar screen about four years ago, it took us a few years before we even dove into that space. And that space is a little different, you know, it doesn't necessarily, as far as the operational side of it, we don't have vertical integration, a vertically integrated property management company for the parking sector. We just work with, you know, local and regional operators in whatever particular marketplace we own in.
[00:06:00] Kevin Bupp: And so while there's asset management involved, we're not necessarily having to hire a lot of in-house employees to run that side of our business. And so it's not set it and forget it, but it's not as operationally intensive as mobile home parks. And again, we took a couple of years of really understanding that asset class before we dove into it. And really the same, the same is true with build to rent. And, you know, at the end of the day, build the rent, it's residential, right? I mean, it's, it's, it's residential housing and, you know, it's, it's similar to that of single-family rentals. It's similar to that of multifamily apartment complexes. It's similar to that of mobile home parks. It's just a different form. It's purpose-built, you know, residential housing. And so the projects that we have working in Phoenix are four urban infill locations. These are, you know, main, main on main locations, irreplaceable locations, walkable to all the nightlife restaurants, locations that you know, don't run the necessary risk of, of being on the outskirts of when the music stops, right? We've got a massive shortage of housing. Right now, the music is going to play for many years to come. The data will show that, like, anywhere between 4 to 5 million, you know, homes that we're short at the present time or residential units that we're short at the present time. And we're not nearly producing enough to ever catch up to that anytime soon. You know, again, data comes from all different streams, but one would say that it's literally going to take us 10 years to even, truly, you know, get caught up at any pace whatsoever. I mean, we're literally, we're still falling behind at present time.
[00:07:26] Kevin Bupp: And so, you know, we love Phoenix. I mean, Phoenix is just a, it's a very dynamic marketplace. You know, a lot of fortune companies there and moving there. It's a very diverse local economy as well. It's very different than what it was prior to the great recession. It's kind of, I like to compare it to Florida. Like, Florida is a very different state than what it was prior to 2008. Prior to 2008, it wasn't very economically diverse. It was heavily weighted and the construction side of things. So when we had an oversupply of homes and the music kind of stopped down here, a lot of those jobs, those folks that had no jobs anymore moved away. And so we had a, we had a population actually moved away for a period of time and ultimately in excess of housing. Today, that's a very different case and the same goes with Phoenix. And so just super excited about those properties. And, and again, really, I think one of the most exciting about built to rent is being able to actually purposely build a product today for long-term rental uses, not necessarily taking a townhome that was built to sell and then, you know, converting it into a long term rental. And so we're putting a lot of thought energy and focus into the materials that we use and the overall quality of build. So these things are durable and can withstand, you know, the, I'm not going to say abuse 'cause not everyone abuses their rentals, but. They typically see a little bit more abuse than a standard, you know, homeowner might put on a home.
[00:08:46] Sam Wilson: Yeah, certainly nobody washes their rental car idea. I mean, it's like, it's going to undergo more abuse than, you know, just a regular home, typically. Tell me, purpose-built. When you say that, like, what are the things you're doing? How is the build changing on a build to rent versus, you know, again, a house that somebody's building to go...
[00:09:04] Kevin Bupp: Yeah, just a couple of simple things. I mean, even things such as, like the kitchen cabinets, right? We're not literally just going to put the builder-grade kitchen cabinets in. They're going to be more of a mid-grade quality, you know, solid wood and something. That's going to be more durable than some type of, you know, Formica or, you know, I don't, I don't know what they use in, you know, the cheap builder, great stuff, but basically a lot of mid-tier to higher tier components. So even down to like faucets, toilets, things that a lot of people just don't think about a lot, you know, those types of things that we don't think about them, and that's why in builder grade builds, they're literally cheap. They pick the cheapest toilets, they pick the cheapest faucets. They picked the cheapest flooring instead of the four mill flooring or instead of the six mill flooring, which they should be putting in, it's the three or four mill thickness flooring, right? So just little things like that, that the average homeowner doesn't think about that, ultimately, you know, we want to ensure that we're not, every turn that we have, we're not going in and having to replace, you know, these types of components that ultimately become very expensive if you don't do it right from the get-go.
[00:10:02] Sam Wilson: Oh, for sure. Yeah. And I'm thinking about things like, and, and I'm probably even not even using the right words here, but like when you mention faucets like copper components versus plastic, it's like, yeah, this the plastic stuff's going to break in like 90 days.
[00:10:14] Kevin Bupp: Absolutely.
[00:10:15] Sam Wilson: Yeah.
[00:10:15] Kevin Bupp: It looks good when it's new.
[00:10:18] Sam Wilson: It sure does.
[00:10:19] Kevin Bupp: Yeah. Yeah. But look at it 6 to 12 months later and you'll find that it, yeah, it surely wasn't durable.
[00:10:24] Sam Wilson: Right. Absolutely. Tell me about urban infill. When you say that, is this, are you guys, you know, buying and building an entire neighborhood at a time? Is it one lot at a time? How, how does that work?
[00:10:34] Kevin Bupp: No, that's, that's a great question. So these particular four projects I was speaking to are townhome projects. So, two and then three story townhome, you know, contemporary, modern townhome projects. And when I say urban infill, these are, you know, each one of these sites, the majority of these sites had something else on it. You know, an old, an old building of some sort, or, you know, maybe a few homes on, you know, a couple of parcels that we've, that we've combined. But the average, you know, the small, the smallest size of these four projects, one is 21 units and the largest of these four projects is roughly 50 units. And so these are not, they're not full-blown at scale neighborhoods, but they're also not individual units as well. You're somewhat constricted to, you know, what you can build in urban infill locations, 'cause very rarely are you going to find yourself to where you can assemble, you know, multiple acres, 4, 5, 6, 7, 8, 9, 10 acres in these urban locations. And so, you know, we're talking a couple, you know, 3, 4, 5-acre tracks of land at, at the largest. And so again, somewhat restricted to what you could actually put there.
[00:11:35] Sam Wilson: I mean, that's kind of a needle in a haystack. I would think to be able to find, you know, again, even 4 or 5 acres in a, in an urban infill location, that's not already developed or not, you know, way overpriced. So how do you find opportunity on that front? I mean, is that just boots in the ground that know the area?
[00:11:51] Kevin Bupp: That is boots on the ground. Yeah, so we've got a partnership. We, we basically partner with, he's a very close friend of mine. He runs a group called Urban Phoenix. He's been a developer for 20-plus years and, you know, cut his teeth in Manhattan for a decade. And ultimately has been, you know, working in the Phoenix marketplace, has the relationships, you know, he does seem to have the relationships. They've got the local market knowledge that's necessary, you know, to think that myself and my team, you know, we're not, we're based in Florida, we're not based in Phoenix.
[00:12:17] Kevin Bupp: Phoenix is a, it's a very large MSA. To think that, you know, we would just go there and be able to, you know, be successful in our own, I think would be silly thinking. You know, it takes quite some time to build that, not just the local market knowledge. Knowledge is one thing, but actually having those strategic relationships that are necessary and not even just with brokers, but also the municipality, you know, with the planning, zoning boards and, and knowing those individuals. And so the team that we're working with, the partnership that we formed, they've, they've been in that marketplace now for a decade and know it quite well. And so that's the strategic advantage that we really have in this particular project.
[00:12:53] Sam Wilson: Absolutely. What are the compelling metrics in the build-to-rent space? I mean, clearly, you know, you told us in mobile home parks, you've seen them trade at a sub-four cap. So there has to be some more compelling kind of metrics surrounding build to rent.
[00:13:06] Kevin Bupp: Yeah. You know, it's interesting. So I was just at the IMN conference down in Miami. I guess it's been about a month now. And, lots of smaller time and medium size investors in the residential space. However, over the last couple of years, it's, it's really morphed into not just residential investments, but built to rent really as its own category now at these IMN conferences. And, there was a large number of institutions being represented at these IMN conferences. In fact, they have, IMN now puts on, I think, two a year, built to rent specific conferences. One's actually coming up, I believe it's in, in Vegas sometime here in September. So coming up in a few months, but basically the institutions, it's literally the fastest growing sector, you know, or asset class. And it wasn't even considered an asset class until very recently, literally over the last decade. In fact, it's still trying to find its identity, right? You meet folks that say, they call it build-to-rent, some call it build-for-rent. Some do B for R, you know, I mean like it's, it doesn't really even have its true identity yet. But what it does have is it has a ton of interest on the institutional side. The challenge is that there's not enough supply. You know, most institutional investors don't want to get involved on the development side. They don't want to be there. They want to, they want to buy the product either at CFO or already occupied. They want to buy a stabilized property.
[00:14:23] Kevin Bupp: And, and so a lot of them have, they're willing to take to CFO, but there's not even enough homes being built right now for them to actually, you know, fill their coffers enough. And so when I say that, you know, we, we talk about mobile home parks and, and multifamily trading at just all-time historical low cap rates, built for rent, actually, you know, takes the cake there. Green Street and, and all the other data aggregators out there, they're following it. There's information about it, but not as mature as what we'll find here over the next five and 10 years, as it finally gets its own identity and truly becomes an asset class. But in any event, they typically trade for anywhere in two and a half ranges to, you know, sub-four range. So two and a half to the four is what cap rates these things trade on if they're being sold off at, you know, at stabilized, at a stabilized period of time.
[00:15:11] Sam Wilson: Right. And so I guess that's my final question is what's the exit, you know, for you guys?
[00:15:15] Kevin Bupp: Yeah. So yeah, no, that's, that's a great question. We're not really looking to build to sell. You know, building in these strategic locations, like, you can't replace them, you know? So it's kinda like how I always felt about mobile home parks and we have sold mobile home parks, but we know they're not making anymore, right? And so when you find a great mobile home park or, or even a great parking asset in a very strategic location and a growing marketplace where the demand is increasing. It's going to be very challenging to ever replace that particular asset. And I feel very much the same about these, these build-to-rent properties that we're building. And so, while I'm not going to say that we'll never sell any of these developments, that is not our intent. Our intent is to actually build to hold and ultimately, you know, build a portfolio of these strategically located infill locations and build a portfolio out of it. And so not saying that we might not flip one out to, you know, to an institution to lower our basis overall, but generally speaking, we're looking at a 10-year horizon here.
[00:16:10] Kevin Bupp: Got it. Has that investment thesis changed at all in the last decade for you with this idea of just build to hold?
[00:16:17] Kevin Bupp: It has not. It has not, but you know, things come up that ultimately that, that will, you know, maybe change, you know, that direction of, of what had initially been thought of is like, we're going to hold this thing for 10 years to, well, maybe we should consider selling it. I mean, there's a litany factors there, you know, just using maybe examples of mobile home parks, you know, buying an existing product, something that was built 50 or 60 years ago, you can spend, you know, months doing due diligence. You can do market studies, you can hire, you know, outside consultants and feel that you have a good handle on the property, but there's always skeletons that come up in a particular property. It could be skeletons related to the market, skeletons related to the property itself, or just, you might find that you originally intend on expanding in that, that particular market. And so you bought this one, you intend to buy three or four more, but then you come to find that that's not necessarily where you want to, you know, place your energy and resources. And so why we, why are we just going to hold this one in this one market, we should sell this one out and focus our energy where we've decided that we're going to do an expansion. And so again, but our, our, our general thesis has not changed. I mean, we're long-term holders. And again, looking at most of these assets, whether it's built for rent, parking, or mobile home parks. I just know that they're not building anymore parking, not a lot of it, right? There are major restrictions on new parking coming to market. We know that that's the case with mobile home parks and then these built to rent, at least these projects that I'm speaking to, given that they're in urban infill locations, they're already in areas that are densely populated that have minimal land for development. And so I feel that they're irreplaceable in that. We'll be very happy in 10 years, looking back that we actually held onto them.
[00:17:53] Sam Wilson: Yeah, absolutely. I love that. And that's something that, you know, we've heard that, and again, it goes back to your podcast, Real Estate Investing Cash Flow. I mean, that's kind of, but that's something I just keep hearing more, you know, we've seen a lot of, you know, equity multiples, you know, huge IRR returns, people getting really excited about these monster appreciation plays, but I've seen even a, a change of tune from investors, you know, as they're reaching out and going, I just want cash flow. I just want to know that whatever we buy produces an income for an undefined period of time.
[00:18:22] Kevin Bupp: Well, well, so, you know, I, I agree with that and when you're continually, you know, flipping in and out of properties, you know, that's great. It produces massive IRRs and, you know, you're hitting home runs every time seemingly, but it also creates challenges on the other side, right? It creates challenges for your investors. I mean, as far as, you know, recapture. Now they've got, they got to think about where they're going to put their money again, right? Like, there's difficulties with that, especially with a lot of retail investors, like less sophisticated investors that they've got money to place. They don't want to be thinking about, you know, where the hell am I going to put this? You know, this a hundred thousand, 200, $300,000 thinking about every couple of years. And that takes work. That takes effort to do due diligence on your different sponsors, you know, if you're not going to stick with the same ones. And so, and it also creates, you know, tax challenges as well. And so I, I agree with you, you know, and we've done, we've tried to do a really good job over the, you know, the last decade or so as we really, you know, try to form our avatar and find who are our particular avatars of investor, who that individual is, what are they seeking?
[00:19:21] Kevin Bupp: You know, we're looking for that individual that's looking for, you know, long-term stable cash flow. They don't necessarily need to be hitting, you know, 20% IRRs to make them happy. They don't necessarily have to hit home runs. They'd rather hit singles and doubles and being very consistent, than that of just, you know, big wins every couple years, and then having the challenge of I've got to find a replacement, I've got to find a replacement. I've got to find somewhere else to put my money and, and making them actually have to work for their investment where their investments should be working for them.
[00:19:48] Sam Wilson: Yeah. And also I think coupled with that is, is when you hit those big wins, which they're fun. Don't get me wrong. I love a big win, but it also that big win comes with some risk attached to it. And I think I see with people, you know, recognizing that, especially in the turbulent times, we're in going, you know what? I kind of want to de-risk my portfolio. I want to make sure that it produces an income and then just kind of leave it, set it, forget it, you know, to your point there.
[00:20:10] Kevin Bupp: And I think what it depends what stage you're at with your wealth. I mean, are you looking for, you're willing to take more risk today, you know, and hit those triples and those home runs to, you know, to accumulate more wealth? You're not looking for, you know, 2% or 3% returns, like you definitely want to grow your wealth still. So you're looking for something that's consistent, you can get, you know, 6 to 8% returns in your money, or are you looking simply for the lowest risk investment possible and just simple wealth preservation, right? Like, there's those three buckets, really, depending on where you're at. And I think, I think most of our folks are in that middle bucket, right? Like, they're looking for something consistent, maybe not just, they're not in a wealth preservation stage. They want to preserve it, but they still want it to grow as well. And looking for something that is fairly low risk and a great market to do it.
[00:20:51] Sam Wilson: And parking, I think, achieves that for a lot of people. Can you give us a run-through on the last deal that you guys closed in the parking sector?
[00:20:58] Kevin Bupp: Yeah, no, absolutely. So, the last deal that we, that we closed, it was a, a multiple step or multiple-prong deal, but it was a, it's a parking deck. It's actually in our backyard. It's in Clearwater Beach right here in Florida, Tampa Bay market. It's a 702-space, seven-story parking deck with 12,000 square feet of retail on the first floor, it's a block from the Gulf of Mexico. It's a phenomenal location, massive barriers to entry. They literally will not allow more parking to be built on that island. This was actually a public-private partnership with the city of Clearwater and the local private developer. They built it six years ago. And, you know, as, as these things sometimes go. The partnership, it had strains in it, you know, the city was, you know, provided the proforma of how this was going to perform for them. It didn't meet any of those metrics for a litany of reasons. The private developer did quite well. They had the best floors. They condo-wise each floor. And so they had the best floors. They did a good job negotiating this deal on the front end. But ultimately the private developer wanted to, you know, take that money and redeploy it in another asset.
[00:21:55] Kevin Bupp: And then the city just wanted, they wanted to take that money and actually put in another project 'cause their return on it has been horrific over the past six years. They've kept their rates artificially low over the past five years, you know, half of what the market is there. And so we basically, you know, the, you know, the, the deal was essentially getting both parties to agree that we're going to, that we're going to sell. We had to close the private portion first, and then it took us some time to get the city's portion closed. We had an operator lined up already that we've prenegotiated a trip and net lease with an operator that manages, you know, 50 plus parking assets down along the beaches. And so very familiar with that marketplace. And so, you know, we, a lot of the value add was done in the year that it took us, you know, from the initial conversation to the actual closing of the deal, most of the value add happened in that span of time, you know, it being of negotiating with both the city and the private, and also getting that private operator, that local operator in place for that triple net lease. And so more excited about it. It's only six years old. I mean, it's a fairly new structure. I mean, which isn't that common in the parking space to find a garage that's only six years old, that's actually available for sale, any great location.
[00:22:59] Kevin Bupp: And, so anyway, we're super excited about it's, it's a phenomenal deal, you know, kicking off a ton of cash flow, and there's still a good bit of upside there for that operator stepping in. And, they've instituted some dynamic pricing, you know, the prior operator that worked for the city and the private developer, literally just had $3 an hour, didn't have any flat-rate pricing for, you know, events, holiday, weekends at the beach, 4th of July, things of that nature. They just kept that $3 an hour all the time. So they had a lot of meat left on the bone for that new operator step in, and they're excited about it. They're happy. We're happy. It's just been a phenomenal deal all the way around.
[00:23:31] Sam Wilson: I love that asset class. That's really cool. And I, and I, and I'm pumped to see you guys, you know, doing well with that, that that's a lot of fun. I think that's, you know, again, unique asset class and it's cool. You're finding those opportunities. I've certainly seen the same thing. You know, those public-private partnerships. You know, we, we even had an opportunity at one point they brought us a bunch of garages to build, but their underwritten performers were just so, so far off, it was like, guys, you can't. It's just never going to work. Like, no.
[00:23:58] Kevin Bupp: Yeah, we actually got a hold of the proforma that the consultant provided the city, you know, prior to the development of the garage. And, like, there wasn't one year where it actually hit that. But again, most of that was because the city basically of the seven floors of the parking deck, the private developer owned the first, they owned the first two and the retail and the seventh, and then the city-owned 3, 4, 5, and 6. Well, in normal times, the first two floors got the majority of the traffic. And then proportionally speaking, they actually shared the expenses proportionate to their ownership. And so the private developer only owned 252 spaces. The city-owned, whatever the number is, it was, you know, 450 or 460. Anyway, they proportionally paid much more in expenses but had way less revenue. I mean, it was, again, kudos to the private developer from the negotiations on the front end, 'cause they did a phenomenal job, but unfortunately, the city got the short end of the stick and it just never ever met their projections.
[00:24:49] Sam Wilson: Right. And I mean, the city doesn't know parking. That's not their business.
[00:24:53] Kevin Bupp: No. They should have bought, the city should have actually bought the other. That's what they should have done, but they're already so far in the water and they just, they had another big project happening. They just wanted to take their, their millions and, you know, redeploy it into the other project. They didn't want to have any, any discussions about buying the other, you know, the other part of the parking. So obviously we were the guys with the capes on and came in and saved the day.
[00:25:14] Sam Wilson: Good for you. I love it. Love that story. Kevin, thank you for coming on the show today and, and sharing with us everything you guys are getting involved in, where you see the mobile home park space right now, how you guys are crushing it in parking, and then, you know, the opportunity you guys see in the builder rent market there in Phoenix. I love it. You've shared with us a ton of information. Certainly appreciate it. If our listeners want to get in touch with you or learn more about you, what is the best way to do that?
[00:25:34] Kevin Bupp: Yeah, they can go to kevinbupp.com. You can contact me there if you want to learn about Sunrise Capital Investors, which is our investment arm. You can go to investwithsunrise.com and then, Sam, if you don't mind, I actually just released a book too. I'd love to give a free copy to your listeners. They can go to kevinbupp.com/freebook, and you can see it on the screen behind me. I don't know if we do this in video or not, but it's called The Cash Flow Investor. It's about building wealth in commercial real estate. And again, they can grab a free copy by going to kevinbupp.com/freebook.
[00:26:00] Sam Wilson: Awesome. We'll certainly include that there in the show notes as well. And yeah, this will be on YouTube as well for those watching on YouTube. So, Kevin, thank you again for coming on. I certainly appreciate it.
[00:26:08] Kevin Bupp: Sam. Thanks for having me. It's been fun.
